Commissioner of Internal Revenue vs Pascor Realty & Development Corporation

FACTS: BIR Commissioner authorized revenue officers to examined the books of accounts and accounting records of Pascor Realty (PRDC). Such examination resulted in a recommendation for the issuance of an assessment amounting to P7,498,434.65 and P3,015,236.35 for the years 1986 and 1987, respectively. Commissioner of Internal Revenue filed a criminal complaint before the Department of Justice against the PRDC, its President Rogelio A. Dio, and its Treasurer Virginia S. Dio, alleging evasion of taxes in the total amount of P10,513,671.00. Pascor filed a request for reconsideration/reinvestigation which  the CIR denied prompting the respondents to elevate the CIR’s decision to the CTA. CIR filed a Motion to Dismiss on the ground that CTA has no jurisdiction over the subject matter since no formal assessment has been issued against PRDC. The CTA denied the Motion stating that the criminal case for tax evasion is already an assessment. The amount and kind of tax due and the covered period are sufficient details for an assessment. CA agreed with the decision of the CTA.

ISSUE: Whether or not the criminal complaint for tax evasion can be construed as an assessment.

RULING: NO. Neither the NIRC nor the revenue regulations governing the protest of assessments provide a specific definition or form of an assessment. However, the NIRC defines the specific functions and effects of an assessment. To consider the affidavit attached to the Complaint as a proper assessment is to subvert the nature of an assessment and to set a bad precedent that will prejudice innocent taxpayers.